Vivus Inc (VVUS.O) signed a deal with Auxilium Pharmaceuticals Inc AUXL.O to market its erectile dysfunction drug in the United States, more than a year after it was approved.
Vivus had so far failed to find a U.S. partner for the drug, Stendra, approved in April 2012, as the company focused on the launch and marketing of its diet pill Qsymia that is yet to live up to its lofty sales expectations.
The Stendra deal, worth up to $300 million, takes advantage of Auxilium's established sales network that already markets men's health products such as the testosterone gel, Testim.
Auxilium, which will pay an upfront licensing fee of $30 million and up to $270 million in milestone payments, expects the deal to add to its earnings in 2015.
"Possibly more important than the terms of this deal could be that this partnership demonstrates that the new (Vivus) management is capable of executing on partnership deals," Leerink Swann analyst Marko Kozul said in a note.
Vivus board and management were overhauled in July after the company's largest investor First Manhattan Co ran a bitter campaign accusing it of bungling the launch of Qsymia.
Auxilium said it expected to begin the commercial launch of Stendra in the United States and Canada by the end of 2013 and start shipping the drug in December.
Vivus will be responsible for the initial supply and manufacturing of Stendra, which is the only erectile dysfunction drug to get U.S. approval in the past 10 years.
Vivus has already tied up with Italy's Menarini Group in July to market the drug in Europe, Australia and New Zealand.
An estimated 30 million men in the United States are affected by erectile dysfunction, according to the U.S. Food and Drug Administration.
Vivus stock was up 7 percent at $11.06 on Friday morning on the Nasdaq, while Auxilium share was up 2.5 percent at $17.63.
(Editing by Kirti Pandey)